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However, there are a number of large scale office development projects under construction, like at Capital Quarter, as well as plans for more than one million sq ft of new grade A office space at the proposed Central Quay scheme.

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Occupational take up in Cardiff reached 146,739 sq ft in the first quarter this year.

This was 19% above the five year average of 123,000 sq ft and 56% above the 94,163 sq ft seen in the first quarter of 2016.

This success can be attributed to a number of large lot size deals including:

In the last 12 months, 72% of take up in the city centre has come from deals over 10,000 sq ft well above the historic average of 52%.

Gary Carver, director in the business space team at Savills Cardiff said: “Cardiff continues to perform strongly in terms of take up of office space.

"Driven by strong economic fundamentals, with growth expected to rise to 10.1% in the next five years, this has filtered into employment levels and an increase in firms looking for space in the city.”

Mr Carver said strong levels of demand have caused a shortage of supply, particularly for grade A stock which now stands at 155,000 sq ft, which is only enough for around one year’s demand in the city centre."

He added: “The lack of stock is causing occupiers to look towards refurbished office space with ‘defurbished’ stock with exposed brickwork and open plan work spaces becoming increasing popular in properties such as 101 Cardiff.”

Investment market

Office investment into Cardiff got off to a quiet start in the first quarter of the year reaching £21m, compared to £79m in Q1 2016.

However, Savills expects levels to pick up in the second and third quarters.

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Transactions of note in Q1 included the sale of the Media Wales building in the centre of Cardiff acquired by Mayfair Capital, the disposal of Fusion Point 1 on Dumballs Road and the sale of Trinity Court on Newport Road.

Current prime yields in the city stand at 6.1%.

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Ross Griffin, investment director at Savills Cardiff, said: “Investors are seeking a ‘flight to quality’ and those with well let, income producing assets are unwilling to sell unless they secure a strong exit price.

"Rising construction costs are now driving parties to buy, rather than develop new stock, adding further downwards pressure on prime yields.”